NEW YORK (TheStreet) -- SandRidge Energy Inc. (SD) announced on Thursday morning that it has commenced a private offering of $1 billion in aggregate principal amount of senior secured notes, which will be due in 2020.
Shares of SandRidge Energy are down by 3.72% to $1.16 on heavy volume in early afternoon trading on Thursday.
"The notes will be secured on a second lien priority basis and guaranteed by each of the company's restricted subsidiaries that will guarantee the company's revised revolving credit facility," SandRidge said in a statement.
"The issuance of the notes will be conditioned on, among other things, the effectiveness of a fully-committed revised $500 million borrowing base first lien revolving credit facility," the company added.
"It's not surprising that SandRidge is issuing second-lien debt given that they amended their credit agreement earlier this year to allow them to do that," said Bloomberg Intelligence analyst Spencer Cutter.
"Not only does it get them some additional capital and liquidity, but you're also swapping out borrowing-base liquidity -- which is subject to revisions every few months -- to a bond that, once issued, it's issued," Cutter added.
So far today, 15.13 million shares of SandRidge Energy have exchanged hands as compared to its average daily volume of 14.55 million shares.
SandRidge is an Oklahoma City, OK.-based oil and natural gas company that focuses on exploration and production activities in the mid-continent region of the U.S.
Separately, TheStreet Ratings team rates SANDRIDGE ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: